Awards for the most fascinating stories of 2015

Here are the awards for the most fascinating stories of 2015, with the added bonus that the qualifying events have implications that will reverberate into 2016 and beyond.Bloomberg | January 01, 2016, 18:21 IST

This year has been awash with financial and business intrigue and excitement. Here, then, are my awards for the most fascinating stories of 2015, with the added bonus that the qualifying events have implications that will reverberate into 2016 and beyond.

Villian of the year: VolkswagenThe news that Volkswagen, that exemplar of straitlaced German engineering, has spent years telling what we Brits call “porky pies” about its diesel emissions was a corporate shocker of the highest order. As well as wiping a fifth off the company’s market value, the scandal has trashed demand for VW’s diesel cars since the US Environmental Protection Agency revealed the deception in September. The company sold just 887 diesel vehicles last month, down from more than 10,000 in July, as shown by data compiled by Bloomberg Intelligence.

Environmental groups had long suspected that emissions tests were underestimating the nitrogen oxide output of diesel engines. Volkswagen’s malfeasance is likely to accelerate the disappearance of diesel powertrains in the auto industry. It may also hasten the disappearance of the internal combustion engine itself, as Toyota expands its efforts to build the infrastructure for its hydrogen cars while Elon Musk’s sexy Teslas lead the charge on electric vehicles.

Lemon of the year: Apple WatchI number myself among Apple’s fans, with a long (and expensive) history of buying iPods, iMacs, iPads and iPhones on their first, second and then third iterations.

(I even owe my first job to a cursory acquaintance with the Apple Mac in the 1980s, back when Microsoft and the PC ruled supreme.) So this year’s launch of the Apple Watch was a thoroughly discouraging affair, almost as depressing as the boring film about the fall and rise of Steve Jobs, creator of the world’s biggest company.

In fact, the watch, Apple Pay and Apple TV are all disappointments. Chief Executive Officer Tim Cook won’t even reveal what demand for the timepiece has been, for fear of giving away valuable market information (his argument) or because the numbers are an embarrassment (I know which explanation I favour).

The iPhone contributed 66% of Apple’s fiscal 2015 revenue, up from 50% in 2012; but here’s what sales by volume have done in the past year. Apple shares are set to end the year down a bit from where they started it, meaning they’ve underperformed the S&P 500 Information Technology index by more than 7% after beating it by almost 27% in 2014. I’m increasingly of the opinion that Apple is losing its way as a technology innovator. Instead, it’s a marketing wizard selling the same product in different wrappings of different sizes — which leaves it increasingly vulnerable to the shifting tides of consumer taste and market saturation.

Comeback of the year: BitcoinBitcoin was the world’s worstperforming currency in 2014, losing more than 57% of its value against the dollar. This year, the digital currency extolled by some as a technological escape route from government’s snooping into our financial affairs tops the league tables. It’s gained almost 40%, knocking the Somali shilling into second place, the Gambian dalasi into third, and the Burundi franc to a distant fourth spot.

As things have turned out, it’s all about the blockchain technology that underlies Bitcoin.

The distributed ledger that keeps track of who owns what is widely touted as the next hot thing in finance. Blythe Masters (famed for inventing credit-default swaps in her time at JPMorgan) even turned down the chance to run the investment bank at Barclays this year, preferring her current perch at Digital Asset Holdings, which is at the forefront of efforts to use the technology to speed up financial transactions reporting.

Consumer banking still looks like it did a decade ago. “There’s a big fat moat around banking,” former Deutsche Bank CEO Anshu Jain said in October. “That’s kept tech at bay.”

That moat, though, is being breached. And the topic of “Fintech” — the interaction of technology and finance — will dominate much of the coverage of the banking industry next year.

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